The Home Office has launched an inquiry into the death of a police informant found hanging in his cell shortly after admitting that he had made up evidence in a number of cases and intended to retract his statements.

The investigation was ordered after claims by his parents that information about his death was deliberately withheld from the inquest. Paul Day, 31, from Essex, who was nearing the end of an eight-year sentence for attempted robbery, was found hanging in his cell in the segregation unit of Frankland prison, Durham, on October 2 2002. He had acted as an informant in a number of cases.

Newly uncovered letters, seen by the Guardian, reveal that Day had been visited by a lawyer six days before he died and had expressed concern over having given false evidence against a number of people who had since been convicted.

Michael Gibson, of Newcastle-based David Gray Solicitors, visited Day in Frankland prison on September 26 2002, according to one letter. In the letter, dated October 1 2002, the lawyer states: "You say you provided false evidence in court on several occasions ... You wish to right the wrong suffered by various people against whom you made false statements." According to the letter, Mr Gibson advised him he could either hand himself in to police or make a formal complaint to the chief constables of the relevant forces. Mr Gibson also advised Day that he could write to the men's solicitors, to expose the part he had played. He warned him that he could face prosecution for perverting the course of justice.

Among cases Day claimed he had been asked to help with was that of Michael Stone, who was convicted of the murder of Lin and Megan Russell in Kent in 1996.

This crucial visit was not disclosed in two lengthy Prison Service investigations into Day's death, or during a five-week-inquest. The inquest jury concluded that Day had been driven to take his own life because prison staff did nothing to stop other prisoners abusing him, and because of other systematic failures in his care.

Mr Gibson is now believed to be the last person outside the prison system to have seen Day alive. He confirmed that Day had been his client but said he could not discuss the case because of confidentiality.

Day's parents, Andrew and Pauline, have maintained that their son worked as both a police and prison informant but decided to stop shortly before his death because he had come to believe some of those he had helped to convict were innocent. After that, they say, the police and Prison Service withdrew the protection he had previously enjoyed.

They have now written to the director of high security prisons, Peter Atherton, and asked him to explain why information about the lawyer's visit was withheld.

The letter states: "We are of the opinion this information was deliberately withheld from not only our legal advisers and ourselves, but from the coroner. We are also of the opinion that any decision to withhold this information would have to have been taken by senior managers. We regard this as a deliberate omission and not simply an oversight."

The Durham coroner, Andrew Tweddle, described this latest discovery as a "blaring omission." In a letter to Mr and Mrs Day on April 3, he said an explanation should be provided by the Prison Service or HMP Frankland. "It certainly does seem very strange that the visit does not seem to have been recorded in any of the paperwork that I have seen, and further that this fact was not mentioned by any of the witnesses at the inquest."

Mr and Mrs Day said: "We want to get to the full truth about how Paul was treated by the police and Prison Service, as it was clear to us in the last months of his life that he was desperate to have his story told. We won't give in until we find the truth."

Last month the Treasury agreed to make a substantial payment to settle a civil claim brought by Day's parents. A Home Office spokesman said: "An investigation is under way at the moment."